Prada Performance Downturn, Why CEO Confident?

According to the world clothing shoes and hats net, Italy, September 8th

Tycoon

SpA released its financial data for the first half of fiscal year 2017, and sales and net profit fell by 5.5% and 18.4% respectively over the same period.

Prada group 2017's net profit in the first half of fiscal year fell 18.4% compared with the same period last year, China

Outstanding performance, will continue to promote digital strategy.

Although the group's CEO Patrizio Bertelli Bertelli remains optimistic, the continued decline in performance has begun to worry many people about the future development of Prada.

Thomas Chauvet, an analyst at Citigroup, said in its report: "the market has begun to get used to seeing the bad performance of Prada, and they are not showing signs of reversing the situation."

Royal Bank of Canada Europe Ltd's Rogerio Fujimori said: "at present, the time needed for Prada to resume growth is longer than expected."

However, at the conference call, Patrizio Bertelli stressed that he had confidence in the future of the group and said: "our investment in product quality will ultimately be rewarded in the future.

The new generation of consumers hope that we can show our characteristics and introduce breakthrough products, and we will meet their needs.

Patrizio Bertelli said that the group is in the stage of restructuring. He stressed: "the investment in digital channels will bring long-term growth to us, and the reform of the cost structure will also make us more competitive.

At present, the effect of digitalization is not fully apparent, and the digital channels of China, Japan and Korea need further development.

At this stage, we will control operating costs and ensure that there will be no cash flow problems. "

In March of this year, Patrizio Bertelli hired Chiara Tosato as general manager and digital director of Prada.

In the conference call, Chiara Tosato said: "the three goal of the Prada group is to promote online sales, to provide customers with a smooth multi-channel shopping experience, and to increase investment in digital communications."

At present, Prada has launched a localized e-commerce platform in Europe and the United States. It will expand its scope to China, Korea, Japan, Australia and Russia by the end of this year, and will further cover the Middle East and Latin America in 2018.

Chiara Tosato emphasizes: "this platform can simplify user experience and integrate with social network, so that users can directly use the account of Facebook and other social network to login."

Chiara Tosato also mentioned: "at present, this platform provides 10 different languages, and has made localization improvements based on different regions.

At present, Prada, Miu Miu and other brands have already begun to sell on this platform, and other brands will also visit the platform before the end of the year.

On the same day, door-to-door service is also expected to be launched by the end of the year.

After the completion of the digital pformation is expected, by the end of 2018, the number of sales of digital channels will account for 5% of the total.

Patrizio Bertelli points out: "while investing in digital channels, the retail network is still a key component of our business."

In the first half of the fiscal year, Prada retail sales fell by 7.8% compared to the same period last year, accounting for 82% of the total sales.

Bertelli stressed that the company's diversified strategies in store design are effective, especially in stores such as St. Barth, Porto Cervo and St. Tropez.

The flash shop also helped the group create more new shopping experiences.

He said: "we are making the company more responsive to the needs of consumers, so that stores around the world are more suitable for consumers."

CFO Alessandra Cozzani Cozzani of Prada said: "although the cost of investment in digital channels has increased, the cost control plan introduced last year has achieved results.

In the first half of the fiscal year, the total investment in the retail network was 1.056 million euros, and over 100 projects have been completed in the new store's design concept and brand image as well as the supply chain enhancement.

Investing in brands is our top priority, but we are continuing to improve industrial efficiency, reduce costs, streamline corporate structure, improve operational efficiency and normalize capital expenditures.

In addition, in January 31, 2017, after the end of the 2016/2017 fiscal year, the Prada group will adjust the duration of the fiscal year, and the new fiscal year will end in December 31st.

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